By: The Quinnipiac University Economics Research Team, Niamh Savage
Source: Eurostat and own calculations. Exchange rates are inverted to be EURO per local currency (i.e., an increase indicates a stronger domestic currency) and then indexed to be 100 at the start of the period.
The currency trends starting August 13th were very diverse. Relative to the Euro, the Romanian Leu strengthened for the first few days of the period; meanwhile the other currencies weakened. On August 15th, the Koruna, Forint, and Zloty increased dramatically, regaining some of their initial declines while the Koruna was the only currency that strengthened relative to the beginning of the period. The Forint and Zloty also weakened against the Euro by the period’s end. The Forint showed the largest variation, with about 1.5 percentage points of difference from peak to trough. The Romanian Leu remained largely unchanged.
Source: Eurostat and own calculations. Exchange rates are inverted to be EURO per local currency (i.e., an increase indicates a stronger domestic currency). The center line is a rolling three-month average. The upper and lower boundaries are the average plus and average minus one standard deviation, respectively, for the same three-month period.
During this time period, the Polish Zloty and Hungarian Forint ended outside of their historical range. The Hungarian Forint began in the upper end of its historical range, and it decreased below the country’s lower boundary. The exchange rates for the Polish Zloty began, and remained, below their country’s lower boundary. If this large difference continues to persist, the country’s boundaries will likely adjust. The Romanian Leu began and ended within their historical range, however it increased above their upper boundary within the time period. The Czech Koruna began below their country’s historical boundary, but it increased within their range during the period.
Finally, when viewed relative to each other, all countries presented a decrease of exchange rates after August 23rd.